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Fedloans - refi now or closer to 0% interest expiration date (1/31/2022)?

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  • Fedloans - refi now or closer to 0% interest expiration date (1/31/2022)?

    I was going to refi around now when 0% interest was going to end 9/30/2021. It has now been extended to 1/31/2022 however Feds say it is the last time. No idea if there will be any other changes between now and then, such as some sort of amount of loan forgiveness, etc...

    I'm thinking of waiting until December to refi now, since there is still plenty of time and I can wait and see if there'd be the minute chance of new changes. My concern is could the current super low refi interest rates go up a ton by then, or if folks are going to be flooding to refi since Feds say it's the last time?

  • #2
    We are likely in a similar situation because this is my biggest concern right now

    Nobody can predict the future. I've asked before on here if refi now to lock in low rates is a good move and got mixed answers

    My plan is to go crazy the last week of December getting as many private refinance offers as I can. The federal reserve has basically promised low rates until 2023 so I don't think(aka hope) things are going to change much until then. In the meantime I'm going to invest as much I can with the monthly cashflow that will eventually be my student loan payments

    I'm not sure this is the WCI approved method to stretch out my student loans another year...but they're at 0% right now and the after-tax dividend yield on VTSAX is more than that. When that situation changes my approach to my student loans will change

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    • #3
      When people say, "i'm going to invest all the money i was going to use to pay student loans", whats the exit strategy here? You invest your Monthly lets say 10k in VTSAX from now until Feb, then its febuary, and then do you sell your stocks that you invested, then hold 30% of that for taxes and use that to pay your loans? What if the market tanks 10%, then you are holding that money for longer and then when do you sell it? What if you make 2% on that money inbetween now and then? Why not just apply that cash now to your loans?

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      • #4
        Originally posted by Craigslist View Post
        When people say, "i'm going to invest all the money i was going to use to pay student loans", whats the exit strategy here? You invest your Monthly lets say 10k in VTSAX from now until Feb, then its febuary, and then do you sell your stocks that you invested, then hold 30% of that for taxes and use that to pay your loans? What if the market tanks 10%, then you are holding that money for longer and then when do you sell it? What if you make 2% on that money inbetween now and then? Why not just apply that cash now to your loans?
        You leave the money is taxable alone. The point is you just don’t spend it on other stuff, lifestyle creep etc. Once you start having to pay student loans, you redirect your money. That’s my plan at least. I’m not going to refi until it’s closer.

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        • #5
          Why not wait until December and see if there's additional promos the private lenders offer or if the fed moves the goal post back again?

          Private lenders are in a tough position since they've lost tons of business since March of last year.
          Helping student loan borrowers manage their student loans. StudentLoanAdvice.com. [email protected]

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          • #6
            Originally posted by Andrew StudentLoanAdvice View Post
            Why not wait until December and see if there's additional promos the private lenders offer or if the fed moves the goal post back again?

            Private lenders are in a tough position since they've lost tons of business since March of last year.
            Would it be smart to refi once December hits and there's no change with fed loans? Is there some sort of grace/waiting period while refi goes through in which I can revert my decision?

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            • #7
              Originally posted by kev777zero View Post

              Would it be smart to refi once December hits and there's no change with fed loans? Is there some sort of grace/waiting period while refi goes through in which I can revert my decision?
              Just receive the quotes in December. You have a "grace period" for 30 to 60 days to decide on whether you'd like to move forward with the quote or not.
              Helping student loan borrowers manage their student loans. StudentLoanAdvice.com. [email protected]

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